April 2020 – Ukraine’s parliament has approved a law that removes the current ban on the sale of private farmland in Ukraine. The law should become effective on 21 July 2021 and will enable Ukrainian citizens to dispose of, acquire and rezone (change the designated use of) privately owned agricultural land. The contribution of such land into the charter capital of Ukrainian legal entities will also become possible.
Ukrainian banks, including banks with foreign capital, will also be allowed to acquire agricultural land in the course of the enforcement of mortgages subject to the mandatory sale of such land within two subsequent years.
Legal entities owned by Ukrainian citizens will be allowed to purchase privately owned agricultural land and to accumulate a land bank of up to 10,000 hectares starting from 1 January 2024. At the same time such 10,000 hectares limitation does not apply to the banks.
Foreign nationals may be allowed to purchase shares in Ukrainian companies that own agricultural lands in Ukraine, and Ukrainian companies owned by foreign nationals may be allowed to acquire agricultural land in Ukraine starting from 1 January 2024, subject to the approval of a national referendum likely to be held on this issue.
Despite the new legislation, the ban against foreign nationals directly acquiring and owning agricultural land in Ukraine remains in place. The ban on the disposal of state and municipal agricultural land also remains in effect.
The law establishes some general principles for the functioning of Ukraine’s agricultural land market, e.g.:
- until 1 January 2030, the purchase price of agricultural land allocated to the owners of land shares (so-called “payi”) shall not be lower than the normative monetary value of such land;
- the priority right for the acquisition of land (e.g., tenant’s priority right, priority right of municipality, etc.) is transferable;
- cash payments of the purchase price are no longer allowed; payments can be made only via bank transfer;
- the purchaser of agricultural land will be required to document the source of funds used for the purchase.